Dealmaker: Bellwether Enterprise Secures $38M for Office, Industrial
Bellwether Enterprise Real Estate Capital, Cleveland, secured $38 million for office and industrial assets in southern California.
The loans included a $22.5 million refinancing for the MDR Truss Campus in Los Angeles’ Marina Del Rey area. After extensive renovations, six existing industrial buildings were converted into creative office space with a campus-like environment. The MDR Truss Campus totals 68,700 square feet of office space on 2.75 acres near Villa Marina Shopping Center. The property was 100 percent pre-leased to its current three tenants during construction.
Bellwether Enterprise Executive Vice President Shelley Magoffin and Vice President Max Sauerman arranged the life company loan. The 15-year fully amortizing fixed-rate loan priced at 3.64 percent and paid off the construction loan and closing costs.
Magoffin said the loan funded prior to two of the three tenants taking occupancy and all three tenants had free rent at the same time during the first year of the loan, which needed to be accounted for in the underwriting. “Our team was able to fund the loan before tenants were occupying the space and paying rent–two factors that prevent most lenders from even considering a loan–and we were able to negotiate a longer rate-lock commitment period in case of potential construction delays,” she said.
Magoffin and Sauerman also closed $15.5 million in loans for two Los Angeles-area industrial buildings.
The Northrop Grumman Industrial Building in Redondo Beach, Calif., received a $10.3 million life company loan. Built in 1977, the concrete tilt-up building totals 112,000 square feet, composed of 60 percent manufacturing and research and development space, 28 percent office space and 12 percent warehouse space. A single tenant occupies the entire property and has more than five years remaining on the lease.
The new 11-year loan, which refinanced a maturing commercial mortgage-backed securities loan, priced in the upper three percent range.
Magoffin and Sauerman also sourced $5.2 million to refinance Van Ness Commerce Center in Hawthorne, Calif. Constructed in 1998, the concrete tilt-up industrial building was 100 percent leased to two tenants when the financing was arranged and both tenants had near-term rollover risk.
A life company provided an interest-only 10-year loan in the upper 3 percent range. Magoffin said the lender did not require structure or reserves despite the near-term rollover risk and offered a forward commitment with a six-month rate lock period.
